Stock market mostly higher; tech, Amazon gains lift Nasdaq – MarketWatch

U.S. stocks were trading lower Friday morning, with major indexes retreating from early highs as an initial rally in the technology sector faded, adding to the caution over a weak earnings report from energy giant Exxon Mobil and data indicating a decelerating rate of economic growth.

What are markets doing?

The Dow Jones Industrial Average DJIA, -0.27% fell 103 points, or 0.4%, to 24,214. The S&P 500 SPX, -0.08% was down 6 points, or 0.3%, to 2,659. The Nasdaq Composite Index COMP, -0.26% lost 31 points to 7,86, a loss of 0.5%.

For the week, the Dow is down 1.1%, the S&P is off 0.4%, and the Nasdaq is off 0.9%. All three are looking at their first weekly decline of the past three.

What is driving the market?

The latest GDP data showed the U.S. expanded at a 2.3% annual pace in the first three months of 2018, somewhat slower than in the prior three quarters but a better performance than expected. Economists polled by MarketWatch had forecast a 2% increase in gross domestic product.

Beyond corporate earnings and data, geopolitics could swing into focus after a historic meeting between North Korean leader Kim Jong Un and South Korean President Moon Jae-in. The two leaders signed a declaration that they will work toward a “complete denuclearization” of the Korean Peninsula and agreed to formally end the Korean War with a peace treaty, according to media reports. The iShares MSCI South Korea ETF EWY, +0.90%  rose 1%.

Elsewhere, investors might look ahead to next week’s trade talks between the U.S. and China in Beijing. Chinese tech stocks came under pressure on concerns more action could be taken against the sector, after U.S. moves against telecom-equipment maker ZTE 000063, +0.35%  and fears of similar action against peer Huawei 002502, +0.28%

Concerns about a rise in U.S. interest rates were expected to continue to abate, as the yield on 10-year Treasury notes TMUBMUSD10Y, -0.91%  retreated further from the psychologically important 3% level.

Which stocks are in focus?

Amazon AMZN, +4.46%  shares climbed 4.3%, hitting an intraday record at $1,638.10 in early trading before paring some of its gain. The e-commerce giant late Thursday posted profit that more than doubled, as it announced a 20% increase in Prime subscription prices. J.P. Morgan on Friday lifted its price target on Amazon shares to $1,900 from $1,650, while Stifel Nicolaus raised its target to $2,020 from $1,800.

The company’s rally boosted the consumer-discretionary sector up by 1.2%.

Read: Facebook, Amazon results show that FAANG stocks still have bite

Intel INTC, -0.17%  rose 0.1% after the chip maker’s quarterly results and outlook beat Wall Street forecasts late Thursday. And Microsoft Corp. MSFT, +0.08%  rose 0.2% after it released better-than-expected earnings and strong guidance. Both Intel and Microsoft are Dow components, and both traded well off their highs of the session; Microsoft had risen as much as 3.9% while Intel rose as much as 5.2%.

So far this season, about 80% S&P 500 companies that have reported beat forecasts, but the better-than-expected results have often failed to lift individual share prices.

Exxon Mobil Corp. XOM, -3.36%  fell 3.8% after the Dow component reported first-quarter earnings that missed expectations, though revenue came in ahead of analyst forecasts. Chevron Corp. CVX, +1.26%  rose 1.2% after posting stronger-than-expected earnings, but revenue that was below forecasts. The energy sector fell 1.2%, by far the weakest performer of the day.

Expedia Group Inc. EXPE, +8.03%  jumped 8% after the travel site late Thursday posted better-than-expected bookings.

Starbucks Corp. SBUX, -2.07%  slipped 0.9% after the coffee giant late Thursday reported mixed results for its fiscal second quarter.

Colgate-Palmolive Co. CL, +0.27%  shares rose 0.4% after the consumer goods giant reported a first-quarter profit beat and revenue miss early Friday.

Phillips 66 PSX, -1.10%  said early Friday that profit fell 2.1% in the first quarter, dragged down by lower year-over-year refining income. Shares fell 1%.

What are investors saying?

“I think corporate earnings—especially Amazon, Intel, and Microsoft—are the key for today, Amazon in particular. These stocks continue to post extremely fast growth, and I think the story of the market being led by tech names is still intact. The FAANG group will make a recovery and should continue leading the market in the remainder of the year,” said Jack de Gan, chief investment officer at Harbor Advisory Corp.

He added that while GDP growth remained solid, it had been slow. “I’m worried there may have been an inflection point when Trump started to talk about trade and tariffs. If we start to see more trade tensions, then the idea of 3% growth goes out the window.”

What are other markets doing?

Asia markets had a mixed session, with China stocks SHCOMP, +0.23%  down on concerns about possible U.S. action against tech companies. European stocks SXXP, -0.04%  opened modestly higher, but British stocks rallied as the pound following dismal U.K. GDP data.

U.S. oil prices CLM8, -0.37%  were modestly lower, while gold prices GCM8, +0.39%  were slightly higher. The ICE U.S. Dollar Index DXY, +0.07%  jumped 0.3% to 91.843.

—Sara Sjolin contributed to this article